Kamehameha Schools
threat from IRS

IF Henry Peters is right, a decision is pending in the Internal Revenue Service that could cost the Kamehameha Schools hundreds of millions of dollars. The Bishop Estate trustee says the Western regional office of the IRS wants the schools to abolish their policy limiting admissions to children of Hawaiian ancestry.

Refusal of the Bishop Estate trustees, who would have to make such a decision, to change the schools' admissions policy might result in a ruling that the policy is racially discriminatory and loss of the schools' tax-exempt status. That would be a huge financial blow to the institution.

Peters told the Star-Bulletin's Rick Daysog that a decision on the question has not yet been made by the IRS. He says the outcome will be subject to negotiation between the Bishop Estate and the federal government.

For years it appeared that the racial discriminatory question had been resolved. The IRS ruled in 1975 that the Kamehameha policy was not discriminatory, and it reinforced that decision in 1986. It isn't clear why the issue has been reopened.

In recent court filings, Peters and two other Bishop Estate trustees, Richard Wong and Lokelani Lindsey, said they believed the IRS might be examining the schools' admissions policy. They vowed to defend the policy as vital to the legacy of Princess Bernice Pauahi Bishop. Peters said he would be willing to give up the schools' tax exemption in order to defend the policy.

The IRS is believed to be winding up a four-year audit of the Bishop Estate, examining its tax-exempt status, lobbying practices and trustees' compensation.

The policy of restricting admission to children of Hawaiian ancestry is fundamental to the mission of the Kamehameha Schools. The threat of loss of tax-exempt status would pose a huge dilemma for the trustees.

However, this problem should not be confused with the charges against the trustees and the case for their removal, as brought by the state attorney general. Peters, Wong and Lindsey are accused of abusing their authority at the expense of the estate and the schools. Peters has been indicted on a conspiracy charge in connection with an alleged kickback in a real estate deal involving the estate.

Trustees should not be allowed to divert attention from those charges by posing as defenders of the schools against the IRS. The admissions policy has nothing to do with their problems.

Hong Kong ruling

FOR the first time since the 1997 turnover of Hong Kong to China, a Hong Kong authority has challenged Chinese law. The outcome of the conflict could have wide ramifications. The Court of Final Appeal, Hong Kong's highest court, ruled that people with one Hong Kong parent have the right to live in the territory and do not need permission from mainland China to do so.

The court said China was violating the constitutional rights of emigrants with Hong Kong ancestry by insisting on its own screening process. China requires people to obtain exit permits before they move out.

The decision came as a relief for about 1,000 children who were illegally smuggled into Hong Kong before the handover from British to Chinese rule. It overturned a lower court decision ordering four mainland-born children to return to China proper.

In addition, the ruling could open the way for hundreds of thousands of people in China who have one Hong Kong parent to enter the territory. Hong Kong has approved the applications of 13,000 people still waiting for China's permission to leave.

The court upheld the Hong Kong government's immigration screening procedures, put in place nine days after the hand-over, but said anyone who arrived in Hong Kong before the law was passed could automatically stay.

This is a significant victory for human rights, but it poses a clear challenge to Beijing's authority. China committed itself to respect Hong Kong's legal, political and economic system for 50 years after the turnover. But can Beijing accept the decision of a Hong Kong court that defies its own policies? The answer could speak volumes about the true status of Hong Kong.

Fireworks pollution

IF you thought the smoke this New Year's Eve was the worst ever, you were right. Official confirmation comes from the state Health Department. How bad was it? Air samples taken during the peak hours of fireworks use contained as much as 10 times as much smoke as was recorded the previous year.

The highest level was recorded in Liliha at 2 a.m. Jan. 1 -- 1,509 micrograms of minute particles per cubic meter of air. The normal reading in Liliha is 10 to 15 micrograms, the department said. A spokesman said, "I don't think there's a place in the United States with such high recordings of particulate matter."

No doubt the sharply higher reading was due in part to the fact that there was no wind that night. But Hawaii residents can't count on the wind to remove the smoke.

The annual fireworks orgy has grown to the point described by Governor Cayetano as "utter madness." The fireworks apologists' argument that this is a valued local tradition might be plausible if the practice had not grown so blatantly out of hand.

In its present magnitude, the use of fireworks at New Year's has become an intolerable intrusion on the rights of all people to breathe comfortably, to be free of ear-splitting, virtually continuous explosions and to spend the night without fear that their homes will be burned down by irresponsible people who fling firecrackers around with abandon.

It is absurd to defend the chaos of last New Year's Eve as a traditional celebration. The time has come to call a halt.